Owens-Illinois, Inc. : O-I REPORTS FIRST QUARTER 2013 RESULTS Price gains and
structural cost reductions partially offset lower shipments, particularly in
FOR IMMEDIATE RELEASE
O-I REPORTS FIRST QUARTER 2013 RESULTS
Price gains and structural cost reductions partially offset
lower shipments, particularly in Europe
PERRYSBURG, Ohio (April 23, 2013) - Owens-Illinois, Inc. (NYSE: OI) today
reported financial results for the first quarter ending March 31, 2013.
*First quarter 2013 earnings from continuing operations attributable to the
Company were $0.48 per share (diluted), compared with $0.73 per share in
the same period of 2012. Excluding certain items management considers not
representative of ongoing operations, adjusted earnings^ were $0.60 per
share, compared with $0.73 per share in the prior year.
*Higher operating profits in South America and Asia Pacific were more than
offset by lower results in Europe. South America benefited from volume
growth and logistics savings from a new furnace brought online in Brazil
in late 2012. As expected, European operating profit was adversely
impacted by lower demand and efforts to normalize production levels over
the course of 2013.
*Price and product mix increased 2 percent year on year, with gains
reported in all regions. Price increases covered cost inflation.
Commenting on the Company's first quarter results, Chairman and Chief
Executive Officer Al Stroucken said, "We are pleased with our performance
overall. Our price increases continue to cover cost inflation. We are clearly
seeing the financial benefits of our global structural cost reductions, as
well as the impact of our growth strategy on South America's rising
profitability. Yet we faced lower demand, as expected, particularly in
economically troubled Europe. Our initiative to mitigate production volatility
over the course of the year was a planned headwind in the first quarter, but
will benefit us in the second half of the year."
Net sales in the first quarter of 2013 were $1.64 billion, down from $1.74
billion in the prior year first quarter. Currency translation adversely
impacted sales by 2 percent. Volume, in terms of tonnes shipped, decreased by
5 percent year-over-year. The decline in volume was most pronounced in Europe,
due to difficult macroeconomic conditions, the absence of major sporting
events that occurred in the prior year and the share shift to smaller
competitors in response to the Company's pricing strategy in 2012. South
America reported modest volume growth, driven by food packaging. Sales prices
globally were up 2 percent, with successful price initiatives reported in all
In the first quarter of 2013, segment operating profit was $226 million, down
from $260 million in the prior year. The Company curtailed production,
particularly in Europe, as part of an initiative to reduce production
volatility over the course of the year. This led to lower absorption of fixed
costs, and therefore lower profitability, relative to the comparable period in
the prior year. The Company expects improved profitability from this
initiative in the latter half of the year. Structural cost reductions
partially compensated for the adverse impact of lower production and sales
Net interest expense^ was $4 million lower than the prior year, primarily
due to debt reduction and lower interest rates. In the quarter, the Company
completed a Euro debt refinancing transaction that reduces ongoing interest
expense and extends our maturity horizon.
The Company's leverage ratio (net debt to EBITDA) was 2.9 at the end of the
first quarter of 2013, compared with 3.0 times EBITDA in the previous year
quarter. The Company expects further improvement in its leverage ratio during
In the first quarter of 2013, the Company recorded two charges to reported
results that are presented in Note 1 below. Management considers these charges
not representative of ongoing operations.
Commenting on the Company's outlook for the second quarter of 2013, Stroucken
said, "We expect continued volume growth in our emerging regions and stable
market conditions in North America. While persistent macroeconomic challenges
in Europe limit our visibility, we expect flat year-on-year shipments there.
We are focused on structural cost reduction initiatives and our European asset
optimization program, which are key drivers within our control that will grow
free cash flow and earnings."
Management reaffirms expectations for 2013 free cash flow (at least $300
million) and adjusted earnings ($2.60 to $3.00 per share).
The table below describes the items that management considers not
representative of ongoing operations.
$ Millions, except per-share amounts Three months ended March 31
Earnings EPS Earnings EPS
Earnings from Continuing Operations $79 $0.48 $122 $0.73
Attributable to the Company
Items that management considers not
representative of ongoing operations
consistent with Segment Operating Profit
Restructuring, asset impairment and related 9 0.05
Charges for note repurchase premiums and 11 0.07
write-off of finance fees
Adjusted Net Earnings $99 $0.60 $122 $0.73
Owens-Illinois, Inc. (NYSE: OI) is the world's largest glass container
manufacturer and preferred partner for many of the world's leading food and
beverage brands. With revenues of $7.0 billion in 2012, the Company is
headquartered in Perrysburg, Ohio, USA, and employs approximately 22,500
people at 79 plants in 21 countries. O-I delivers safe, sustainable, pure,
iconic, brand-building glass packaging to a growing global marketplace. O-I's
Glass Is Life(TM) movement promotes the widespread benefits of glass packaging
in key markets around the globe. For more information, visit www.o-i.com or
The information presented above regarding adjusted net earnings relates to net
earnings attributable to the Company exclusive of items management considers
not representative of ongoing operations and does not conform to U.S.
generally accepted accounting principles (GAAP). It should not be construed as
an alternative to the reported results determined in accordance with GAAP.
Management has included this non-GAAP information to assist in understanding
the comparability of results of ongoing operations. Management uses this
non-GAAP information principally for internal reporting, forecasting,
budgeting and calculating compensation payments. Further, the information
presented above regarding free cash flow does not conform to GAAP. Management
defines free cash flow as cash provided by continuing operating activities
less capital spending (both as determined in accordance with GAAP) and has
included this non-GAAP information to assist in understanding the
comparability of cash flows. Management uses this non-GAAP information
principally for internal reporting, forecasting and budgeting. Management
believes that the non-GAAP presentation allows the board of directors,
management, investors and analysts to better understand the Company's
financial performance in relationship to core operating results and the
The Company routinely posts important information on its website -
Forward looking statements
This document contains "forward looking" statements within the meaning of
Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. Forward looking statements reflect the Company's
current expectations and projections about future events at the time, and thus
involve uncertainty and risk. The words "believe," "expect," "anticipate,"
"will," "could," "would," "should," "may," "plan," "estimate," "intend,"
"predict," "potential," "continue," and the negatives of these words and other
similar expressions generally identify forward looking statements. It is
possible the Company's future financial performance may differ from
expectations due to a variety of factors including, but not limited to the
following: (1) foreign currency fluctuations relative to the U.S. dollar,
specifically the Euro, Brazilian real and Australian dollar, (2) changes in
capital availability or cost, including interest rate fluctuations and the
ability of the Company to refinance debt at favorable terms, (3) the general
political, economic and competitive conditions in markets and countries where
the Company has operations, including uncertainties related to the economic
conditions in Europe and Australia, disruptions in capital markets,
disruptions in the supply chain, competitive pricing pressures, inflation or
deflation, and changes in tax rates and laws, (4) consumer preferences for
alternative forms of packaging, (5) cost and availability of raw materials,
labor, energy and transportation, (6) the Company's ability to manage its cost
structure, including its success in implementing restructuring plans and
achieving cost savings, (7) consolidation among competitors and customers, (8)
the ability of the Company to acquire businesses and expand plants, integrate
operations of acquired businesses and achieve expected synergies, (9)
unanticipated expenditures with respect to environmental, safety and health
laws, (10) the Company's ability to further develop its sales, marketing and
product development capabilities, and (11) the timing and occurrence of events
which are beyond the control of the Company, including any expropriation of
the Company's operations, floods and other natural disasters, events related
to asbestos-related claims, and the other risk factors discussed in the
Company's Annual Report on Form 10-K for the year ended December 31, 2012 and
any subsequently filed Quarterly Report on Form 10-Q. It is not possible to
foresee or identify all such factors. Any forward looking statements in this
document are based on certain assumptions and analyses made by the Company in
light of its experience and perception of historical trends, current
conditions, expected future developments, and other factors it believes are
appropriate in the circumstances. Forward looking statements are not a
guarantee of future performance and actual results or developments may differ
materially from expectations. While the Company continually reviews trends and
uncertainties affecting the Company's results of operations and financial
condition, the Company does not assume any obligation to update or supplement
any particular forward looking statements contained in this document.
Conference call scheduled for April 24, 2013
O-I CEO Al Stroucken and CFO Steve Bramlage will conduct a conference call to
discuss the Company's latest results on Wednesday, April 24, 2013, at 8:00
a.m., Eastern Time. A live webcast of the conference call, including
presentation materials, will be available on the O-I website,
www.o-i.com/investors, in the Presentations & Webcast section.
The conference call also may be accessed by dialing 888-733-1701 (U.S. and
Canada) or 706-634-4943 (international) by 7:50 a.m., Eastern Time, on April
24. Ask for the O-I conference call. A replay of the call will be available on
the O-I website, www.o-i.com/investors, for 90 days following the call.
Contact: Erin Crandall, 567-336-2355 - O-I Investor Relations
Lisa Babington, 567-336-1445 - O-I Corporate Communications
O-I news releases are available on the O-I website at www.o-i.com.
O-I's second quarter 2013 earnings conference call is currently scheduled for
Thursday, July 25, 2013, at 8:00 a.m., Eastern Time.
Adjusted earnings refers to earnings from continuing operations
attributable to the Company, excluding items management does not consider
representative of ongoing operations, as cited in Note 1 in this release.
Excluding charges of $11 million during the first quarter of 2013 for note
repurchase premiums and the write-off of finance fees related to debt that was
repaid prior to its maturity.
First Quarter 2013 Earnings Release
1Q13 Earnings Presentation
This announcement is distributed by Thomson Reuters on behalf of Thomson
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
information contained therein.
Source: Owens-Illinois, Inc. via Thomson Reuters ONE
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